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Technology Stocks : Osicom(FIBR) -- Ignore unavailable to you. Want to Upgrade?

To: bill banks who wrote (5238)	2/4/1998 7:43:00 PM
From: David Pawlak	Read Replies (3) \| Respond to of 10479

Bill- Like you said, it's only speculation.... From listening to the CSCO's conference call last night, I gathered that CSCO is going to let the customers direct them to the best WDM product. From the results of the Gigamux I've been hearing, I believe FIBR has the best system on the market now. CSCO is very aware of the potential of WDM and I personally don't expect them to be out of the market for more than 12 months. I interpretted that to mean that CSCO doesn't want to make a bet on any single company until the winners in the industry clearly emerge (if FIBR's products is as bit error free as I've been hearing it is, I think we will be the winner providing management can manage the growth). A lot of companies are saying that they will have a DWDM within 6 months but I personally doubt that will happen. Just look at the all mighty CIEN, who is a leader in the Long Haul WDM market and has a ton of cash.... even they couldn't meet their initial deadline. Another reason why I think CIEN is a less likely candidate is because they have a rights plan in place which makes it more difficult/expensive for a company to aquire them. The following is from their 12/29 release: "The Rights will become exercisable only if a person or group acquires 15% or more of the Company's Common Stock or announces a tender or exchange offer which would result in its ownership of 15% or more of the Company's Common Stock." On top of that, Pirelli is now alleging willful infringement by CIEN of two additional U.S. patents held by Pirelli". Does CSCO want to get involved in that mess? Back to your question.... It's really hard to answer the question. A lot of what FIBR has to offer would be repetitive for CSCO. However, I think they could benefit from the China factory, the IQX-200, and especially the Gigamux and the Net Arm chip. I believe CSCO would value those key four items to be worth far more than the puny $110 million market cap it has now. To buy any other company in the DWDM field would cost them a lot more and to develop it internally would not only be extremely expensive, but it would put them way behind their competitors. Basically, I think if CSCO does some sort of strategic partnering with FIBR, it would have to be very lucrative for FIBR (lisensing/royalty fee)and I think they would be better off buying the company outright (although I don't think that is in our best interest anywhere below $50).